Professional Documents
Culture Documents
Term: V
Course Name: Retail Management
Name of the Faculty: Sita Mishra
Topic: Assignment 2: “Aldi” (Case Study)
Submitted By: Aparna Laddha
170101017
Section A
Brief overview
Aldi was Germany’s privately held store which originated in 1948.
Its penchant for secrecy made it world’s least known discount grocer in 2013
Since the start it has followed a low-cost model by keeping a few number of SKUs of
basic items as compared to other low-cost retail players.
The frugality of founding members was transferred to the stores which maintained a
very simple look in second tier locations.
A central aspect of Aldi’s model was the ubiquity of private label brands in its stores over
which it exercised rigorous quality control.
It accepted only cash and debit card as modes of payment.
It was leader in Germany and gave tough competition in other parts of Europe. It
entered US in 1976 and had established 400 stores by 1993 with sales $1.2 billion.
Usually Aldi stores were of size 8000-15000 sq. ft. and stocked about 1400 SKU’s.
Decisions about most in-store decisions were taken centrally thereby keeping restraint
on independence of store manager.
Most Aldi workforce was cross trained so that a handful of people could run the store if
needed. Shopping at Aldi stores warranted more self-service from customers.
In 2013, it had 1200 stores operating in 32 states. Aldi was planning aggressive
expansion with 650 new stores by 2018 with target of new 150 stores every year.
Key Issues
Product assortment was limited to basic need items. Hence, many customers considered
Aldi stores as unattractive due to low ambience and felt it did not stock enough
products
Despite being in U.S. market for about 40 years it’s awareness was relatively low
Apart from its online presence, a weekly newsletter was the only other way of
advertisement
Closing time for Aldi stores is 7:00 pm or 8:00 pm and on Sundays it opens only for 5
hours which makes is un accessible for many potential customers
Aldi mostly stocks private labels which it owns which deters many customers who prefer
big national brands
Most Aldi stores did not accept credit cards or personal checks which is a hindrance for
many customers
Presence only in 32 states out of 50 in U.S.
Key Recommendations
Aldi should increase the operating hours of the stores to increase the footfall and
ensure larger sales
Aldi should start accepting credit cards across all stores
Introduce a range of big stores in metros which will be larger in size and store more
number of SKUs
Aldi should conduct market research to better understand the consumers of new
store locations to decide which products to have and store format
Replace some of the private labels with known brands to increase consumer
confidence
Should choose location of new stores according to the kind of customers to be
served
Increase the marketing budget to increase the awareness level and consumer
confidence in Aldi stores
Have in store demonstrations of private labels or comparison with products of
known brands